Guarantors vs Cosigners: What are they and will I need one?

Many landlords have strict requirements when it comes to approving rental applicants and allowing them to lease in their building. If an applicant does not meet a financial requirement set by the landlord, then personal guarantors, co-signers or guarantor services can be viable alternatives.

Guarantors, Cosigners and Guarantor Services

Landlords and tenants aren't always the only people on an apartment lease. As mentioned, if an applicant doesn't meet some of the requirements set by the landlord, then the landlord may require the prospective renter to get some form of guarantee.

Why such strict requirements for landlords in NYC?

There's an expression amongst landlords out there that says "Often times, no tenant is better than a bad tenant." Tenants have rights, outlined in the New York Tenant Protection Laws, and once the applications are approved, and leases are signed by you "the lessee" and the landlord "the lessor", those tenant rights will be established and protected. Because of this, landlords have to choose wisely (without illegally discriminating) to determine which applicants will provide them with the highest, and most consistent benefits (I.E. highest and most consistent rent checks).

By allowing tenants who would otherwise not be approved (or would be on the cusp) to acquire lease guarantees from other parties, landlords can maximize the number of prospective renters, while not compromising their desired tenant standards.

Which renters typically require guarantors?

As mentioned, landlords (or in some instances management companies) will have strict requirements when considering prospective tenants. Keep in mind, that landlords are humans, not machines, and because every prospective renter is different, landlords will have to weigh all of the factors of each option.

Regarding Income: Most landlords expect prospective tenants to make 40x the monthly rent in yearly income. This means that if the apartment you are applying to is listed at $2000, and you are offering $2000, you should be making around $80,000/year in income to expect approval. This burden can be split up amongst roommates ($40,000/yearly each).

Regarding Position: Many landlords will want to know about your job status and position. Different jobs have different levels of job security, and experience also plays a role. Someone who just started a new job will typically have less job security than someone who's been at the company 15 years.

Regarding students: Landlords will almost always require students to obtain some form of lease guarantee.

I don't meet the requirements or am not sure. What are my options?

There are several things you can do to increase your options if your income alone doesn't meet the requirements, or if a landlord requires a guarantee regardless. You can get roommates, sublet from an existing tenant that you know, or look to acquire a co-signer, a guarantor service, or a personal guarantor.

Unsure about where to start? We get it. The application process can be extremely competitive, time consuming and confusing. ApartmentsTogether's A&S Assistance preps you before you go out to look, so that you can really know your options and get an advantage over other renters who are unprepared.

Definition of a co-signer

A co-signer takes on equal responsibility in an agreement, co-rents the asset (in this case, the apartment), and is responsible for payments right from the start of the lease. A co-signer does not live in the unit with the lessee, but rather "co-signs" the lease itself becoming equally liable for any misconduct in the unit.

Definition of a Guarantor service

A guarantor service is a term used to describe a third party Company who promises to pay any debt in the event that the Tenant defaults on their rent obligation.

Definition of a Guarantor

A guarantor is a responsible party (typically a tenant's parent, relative, or close friend) that signs on to the apartment lease (usually at the end in a 'Lease Guarantee') and personally guarantees that the terms will be met by the renter. They key difference between a Guarantor and a cosigner is the point at which the third part assumes responsibility. A guarantor is only responsible for payments once the primary party of the agreement defaults and is then notified by the landlord, while a cosigner is responsible once the lease is executed.

All of these options provide renters with increased flexibility in terms of their apartment options, while also ensuring that landlords can sleep easy at night.